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Canada Emergency Rent Subsidy (CERS) is a new CRA support as of Sep 27th, 2020 for businesses, charities, and non-profit organizations to subsidize part of the commercial rent or property expenses when experiencing loss of revenue. The subsidy is paid directly to qualifying renters and property owners without the participation of landlords.
To be eligible for CERS, you have to have at least one of the following:
· a business number as of Sep 27th, 2020,
· a payroll account as of March 15th, 2020, or
You have to prove a decrease in revenue for the period you are applying for, compared to the previous one. You can use the CRA online calculator to determine how much subsidy you can get.
You must have qualifying property expenses to receive the CERS. Qualifying properties are buildings in Canada that you own or rent and use in the course of your business activities.
Eligible expenses are amounts paid to an arm’s length party and payable, under a written agreement, before Oct 9th, 2020. You can only apply for expenses with respect to the claimed period.
For renters, you can claim the rent you paid or the rent to be paid. You cannot include sales taxes, damages, interests, or unpaid amounts.
If you are the property owner, you can claim the property taxes (including school and municipal taxes), property insurance, interest on commercial mortgages.
Any rent you receive due to subleasing the property must be deducted from the eligible expenses.
CERS Periods and Payments
CERS will support qualifying businesses until June 21, 2021. The first claim period was from Sep 27th, 2020 to Oct 24th, 2020. You have to reapply for the preceding periods which are every 4 weeks. The application must be filed no later than 180 days after the claim period.
The maximum subsidy rate available now is 65% if you lose at least 70% of your revenue. If your revenue loss is less than 70%, the rate of subsidy will change accordingly.
|Your revenue drop||How to calculate your rate|
|Revenue drop of 70% or more||The maximum subsidy rate of 65%|
|Revenue drop of 50 to 70%||(Your revenue drop – 50%) x 1.25 + 40%|
|Revenue drop of less than 50%||0.8 x your revenue drop|
If your business lost revenue because of a lockdown, you can apply for 25% additional lockdown support. If you are not eligible for the base subsidy, you cannot claim the lockdown support for any business location.
The lockdown support = 25% x days of lockdown / 28 days (claim period)
How to Apply
First, you will need to register or be registered for a CRA My Business Account. Update your information and set up your direct deposit with CRA. You need to create a CERS number from your CRA My Business Account.
Once you create the CERS number, you will be able to access the link to the application form:
- Choose the period you are applying for
- Fill in the claim only the information that is applicable to you
- The subsidy amount will be calculated for you
The following lines will be displayed on the application:
- Total eligible expenses on line 155
- Maximum rent expenses on line 170
- Subsidy rate on line 220
- CERS base amount on line 300
- CERS total amount (including lockdown support if applicable) on line 320
CERS versus CECRA
The Canada Emergency Commercial Rent Assistance (CECRA) was introduced in April 2020 and ended on Sep 26th, 2020. The program helped small businesses only, where CERS could be applied for by business.
Unlike CECRA, CERS also covers mortgages, interests, property taxes, and insurances. Furthermore, CERS has two portions; the base subsidy and the lockdown support.
With the CECRA your landlord forgave 25% of the rent, while the CERS provides you with help to be able to pay your landlord. With CERS, you do not have to rely on the approval of your landlord, you can apply directly to CRA.
For more details on income support and other benefits as part of the Federal Government’s Economic Response Plan for COVID-19, click here.
See also our COVID-19: Tax Info Centre, from our TurboTax Support team, answering many FAQs on this topic and more.